Invista's French JV unit struggles to refinance debt

Investment manager Invista said on Friday that its French joint venture company Celsius is unlikely to achieve a refinancing with troubled Icelandic bank Kaupthing regarding a EUR 142 mln senior debt facility maturing at the end of December 2008. Invista said that it and its joint venture partner are still in talks with the lender, which is on the verge of collapse.

'As a consequence, a successful refinancing with Kaupthing is unlikely to be achievable,' Invista said. 'The absence of any meaningful liquidity in the debt markets means it is also extremely difficult to agree new financial terms with any other potential lending party.' Invista remains in discussions with third parties and a further update will be given when appropriate.

The company also noted that it continues to witness a significant correction in real estate markets across Europe. 'As the global financial crisis has intensified, the resulting paralysis in investment markets has accelerated the decline in values across all property markets. Assets are undergoing a second wave of de-rating with the scarcity of available capital providing no support for values. As the de-leveraging continues we expect to see further declines into 2009.'

Despite these headwinds, the group remains on track to deliver results in line with management's expectations for the full year, it said. The group's assets under management in November 2008 stood at £6.7 bn (EUR7.4 bn) compared with £8.0 bn as at 30 June 2008. Fund flows during the 11 months to 30 November 2008 included £377 mln of redemptions from open ended funds.

Invista anticipates further falls in the second half of the year in the value of investment properties.